Planned Economies vs. Free Market Economies

Planned Economies, also known as Centrally Planned Economies is and economic system which decisions are controlled by the government, this means they are responsible to dictate the production type and levels, the prices and wages. It is the government whom is in charge of the economic problem. The resources are fully owned and controlled by state-owned enterprises.

Currently there are only three countries, which develop this type of economy.

There are numerous benefits as well as immense quantities of flaws within this type of economy use in a country. This is specifically designed to help the citizens have economic equality because of the fact that it is the government who controls the resources therefore every single individual will benefit economically in the same level, as well as Planned Economies are designed so absolutely everyone gets a job education and healthcare, therefore unemployment does not exist and you are guaranteed certain standard of life,

All the factors above provide the country an opportunity to obtain the basic needs for everyone in it, so basically poverty is not a factor.

Nonetheless the fact that the government is in charge and owns the resources of production disables the citizens to gain economic independence; therefore the standard of life does not grow as fast. It takes a way the possibility for the individual to obtain infinite financial progress.

Individual studying, work and innovation efforts are not taken into account, so workers are not benefited economically for their hard work and effort.

Free Market Economies are handled by private enterprises; therefore the government has no control over them and resources of production are privately owned.

Subsequently to the inexistence of government intervention over this enterprises, it is the individual whom provides the demand and supply wage. This means that the citizen’s decide their best interest; making it a free market.

In contrary to Planned Economies, Free Market Economies also known as Capitalism, does reward the individual’s achievements. The harder one works and progresses, helping and innovating, the better the economic reward would be. Therefore the standard of life within a country with this type of economy will rapidly increase. Also it is the same individual, which chooses for itself their “best interest”

Nevertheless, because of the lack of government intervention it basically transforms into “every man for itself” so certain standard of living is not guaranteed meaning that government does not assure anything. The individual isn’t guaranteed neither a job, nor education or even healthcare, you are responsible for those yourself, resolving in huge economic and standard of living inequality.

Personally I can conclude that overall I prefer much more Free Market Economies because it encourages society to progress through hard work and innovation. The fact that nothing is guaranteed it determines society to progress in order to survive. A more knowledgeable society will exist because of the on-going pressure to overpass and exceed expectations work wise, only benefiting ourselves.  The more economic resources a better standard of living is presented, therefore if a big number of individuals are presented with it the better quality of life would be.

Inequality is a factor needed for supremacy, this means that the rich need of the poor to produce and work hard, this way a country can maintain itself, but at the same time the hard work coming from the poor would lead them out of poverty or out of low economic resources.

Also because the government has no power or intervention over these private enterprises, anyone has the opportunity to gain big economic rewards not just a few lucky people, members of the government that promote corruption.